Unit 2 P4

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Sources of Finance P4 Introduction In this task I will be analysing the advantages and disadvantages of which route of finance they should take and how it would benefit /not benefit them as a business’s. Chicken legend is a business that comprises of selling fast food but as chicken legend they should look at taking either internal or external sources of finance which could aid them when trying to survive against other businesses or competition. The following sources of are banks, building societies, hire purchase, leasing, venture capitalists, factoring, share issue, friends and family and government grants are all ways in which could either do well with chicken legend or bring down the company. Internal sources of finance Personal Savings Personal savings is the way in which a person saves the money they have earned throughout a particular time. Personal saving will benefit the businesses within the long term run as it will allow the owner it not rely on loans and interest from banks and friends. This will also allow the business to not be in debt from other external sources of finance such as banks, friends and family. An advantage of personal saving is that it is unlimited, this means that the more money you have the more you can spend to improve the business. Another advantage is that there is no interest so this means that you don’t have to pay back anything or be in debt. Finally the benefit of personal savings is that you are in control of where your money goes and how it is spent. The disadvantage of personal savings is that it takes up saved money and time from the business when it could be used for other things. Finally there is also a temptation to spend the personal savings on unnecessary things which could not really benefit the business but also it could be used for selfish reasons such as personal items. Another disadvantage is that
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